Standard for Greenhouse Gas Emission Offset Project Developers Carbon Competitiveness Incentive Regulation

Transcription

1 Standard for Greenhouse Gas Emission Offset Project Developers Carbon Competitiveness Incentive Regulation Version 1.0 December 2017

2 Title: Standard for Greenhouse Gas Emission Offset Project Developers Number: 1.0 Program Name: Alberta Emission Offset System Effective Date: January 1, 2018 This document was created on: December 2017 ISBN No.: Dec 2017 Standard for Greenhouse Gas Emission Offset Project Developers Page 2 of 33

3 Summary of Revisions Version Date Summary of Revisions 1.0 December 2017 The Carbon Competitiveness Incentive Regulation will be effective January 1, This Standard is a document referenced in the Regulation. The information in this standard is largely adopted from the Technical Guidance for Offset Project Developers (February 2013). Draft February 2017 The draft version of this standard was posted for 30 day public comment and was adopted from the Technical Guidance for Offset Project Developers (February (2013). Version 4.0 February 2013 Technical Guidance for Offset Project Developers was published for use. Dec 2017 Standard for Greenhouse Gas Emission Offset Project Developers Page 3 of 33

4 Table of Contents Introduction... 6 Part 1 Regulatory Details... 7 Division Definitions... 7 Aggregated projects... 7 In the event of a conflict... 8 Division Quantification protocol... 8 Using more than one quantification protocol... 8 Protocols withdrawn... 9 Aggregated projects... 9 Subprojects Division Project plan Offset start date Offset crediting period Extension period Division Registration Project report Verification Division Re-verification Re-verification terminated Errors identified by the third-party verifier during re-verification Errors identified by emission offset project developer Invalid emission offsets Division Contact Information Reporting Standard amendment Effective date Part 2 - Requirements for Greenhouse Gas Emission Offset Project Developers Overview of the Alberta Emission Offset System Aggregated Projects Baseline Condition and Project Condition Conservativeness Expansion Right to Transact Emission Offsets Land Based Projects Project Extension Protocol Deviation Requests Protocol Flagged Protocol Withdrawn Requests to use more than one protocol Carbon Offset Emission Factors Handbook Sources and Sinks Validation Offset Project Lifecycle Project Planning and Initiation Dec 2017 Standard for Greenhouse Gas Emission Offset Project Developers Page 4 of 33

5 2.2 Project Implementation and Emission Offset Generation Verification Project Registration Emission Offset Serialization Transfer Government Re-verification Error Correction Error Identified During Verification Error Identified by Emission Offset Project Developer Error Identified During Government Re-verification Removal Registry Process Records Data Management List of Tables and Figures Table 1: Examples of Offset Crediting Periods for Aggregated Project and Subproject Eligibility to Generate Offsets Table 2: Government Re-verification Process and Approximate Timelines Table 3: Registry Project Status Terminology Table 4: Actions and Documents Required for the Registry for Transactions List of Figures Figure 1: Description of Process of Emission Offset Project Lifecycle List of Appendices APPENDIX A: Project Plan Form APPENDIX B: Project Report Form Dec 2017 Standard for Greenhouse Gas Emission Offset Project Developers Page 5 of 33

6 Introduction Part 1 of the Standard for Greenhouse Gas Emission Offset Project Developers is adopted by the Carbon Competitiveness Incentive Regulation (the Regulation ), under the authority of section 61 of the Climate Change and Emissions Management Act (the Act ). Part 1 of the Standard is enforceable as law. Section 15 of the Regulation states An emission offset project developer shall comply with the rules and other requirements set out in Part 1 of the Standard for Greenhouse Gas Emission Offset Project Developers in initiating and implementing an emission offset project. The Regulation further provides that a person who contravenes section 15 is guilty of an offence. Additionally, administrative penalties for contravening section 15 of the Regulation are payable in accordance with the Schedule of the Administrative Penalty Regulation (A.R. 140/2007). In addition to the legal requirements in Part 1 of this standard, emission offset project developers must comply with the Act, the Regulation, and all other applicable laws. Part 2 of the Standard for Greenhouse Gas Emission Offset Project Developers sets out additional requirements for emission offset project developers. Dec 2017 Standard for Greenhouse Gas Emission Offset Project Developers Page 6 of 33

7 Part 1 Regulatory Details Division 1 Interpretation and Application Definitions 1(1) Terms that are defined in the Act and Regulation are incorporated into and become part of this standard. (2) In this standard, (a) activity start date means the first day on which the action that is the subject of an emission offset project starts; (b) aggregated project means an aggregated project described in section 7 of this standard; (c) emission offset subproject means an emission offset project that an emission offset project developer combines with one or more emission offset projects and submits to the Registry as a single aggregated project; (d) extension period means the period of time immediately following the offset crediting period during which an emission offset project may be eligible to generate emission offsets, if approved by the director under section 12 of this standard; (e) flagged protocol means a quantification protocol identified by the department for potential withdrawal or replacement; (f) flexibility mechanism means an alternate or additional quantification methodology, part of a quantification methodology, or alternative requirement within a quantification protocol; (g) Introduction means the portion of this standard identified by the subtitle Introduction ; (h) offset crediting period means the period of time during which an emission offset project is eligible to generate emission offsets as set out in section 11; (i) offset start date means the offset start date described in section 10; (j) Part 1 means the portion of this standard identified by the subtitle Part 1 Regulatory Details ; (k) Part 2 means the portion of this standard identified by the subtitle Part 2 Requirements for Greenhouse Gas Emission Offset Project Developers ; (l) project plan means a project plan described in section 9; (m) project report means a project report described in section 14; (n) quantification protocol means an emission offset quantification protocol approved and published by the department, as amended or replaced from time to time; (o) reporting period means the period of time covered by a project report; (p) Registry means the Alberta Emission Offset Registry; (q) Regulation means the Carbon Competitiveness Incentive Regulation, as amended; (r) this standard means the Standard for Greenhouse Gas Emission Offset Project Developers and includes the Introduction, Part 1, Part 2, and Appendices A and B; (s) Quantification Protocol for Conservation Cropping means the Quantification Protocol for Conservation Cropping, as published by the Government of Alberta and amended or replaced from time to time. Aggregated projects 2 All references to an emission offset project in Part 1 include an aggregated project unless otherwise provided. Dec 2017 Standard for Greenhouse Gas Emission Offset Project Developers Page 7 of 33

8 In the event of a conflict 3(1) If there is any conflict between this standard and the Act or the Regulation, the Act or the Regulation prevails over this standard. (2) If there is any conflict between Part 1 and Part 2 of this standard, Part 1 prevails. Quantification protocol Division 2 Quantification Protocols and Aggregated Projects 4(1) Subject to subsection (2), for each emission offset project an emission offset project developer must: (a) (b) comply with the requirements of the applicable quantification protocol, and initiate and implement the emission offset project in accordance with the most current version of the applicable quantification protocol in place on the date that the emission offset project developer submits the project plan to the Registry in accordance with section 9, unless otherwise authorized in writing by the director. (3) The emission offset project developer may, prior to submitting a project report to the Registry under section 13, apply in writing to the director for a deviation from one or more of the requirements of a quantification protocol. (4) The director may grant or refuse to grant a deviation in subsection (2). (5) Where the director grants a deviation in subsection (3), the director may impose on the emission offset project developer any terms and conditions that the director considers appropriate with respect to the deviation. (6) The emission offset project developer must comply with each term and condition imposed by the director under subsection (4). (7) The emission offset project developer must not initiate or implement an emission offset project using a flagged protocol without prior written authorization from the director. (8) Where the director grants an emission offset project developer written authorization to use a flagged protocol, the director may impose on the emission offset project developer any terms and conditions that the director considers appropriate with respect to the authorization. (9) The emission offset project developer must comply with each term and condition imposed by the director under subsection (7). Using more than one quantification protocol 5(1) Subject to subsection (2), an emission offset project developer must not use more than one quantification protocol in initiating and implementing an emission offset project, unless otherwise authorized in writing by the director. (2) The emission offset project developer may apply in writing to the director for written authorization to initiate and implement an emission offset project using two or more applicable approved quantification protocols. (3) The director may grant or refuse to grant written authorization in subsection (2). (4) Where the director grants written authorization in subsection (3), the director may impose on the emission offset project developer any terms and conditions that the director considers appropriate with respect to the authorization. (5) The emission offset project developer must comply with each term and condition imposed by the director under subsection (4). Dec 2017 Standard for Greenhouse Gas Emission Offset Project Developers Page 8 of 33

9 Protocols withdrawn 6(1) The director may, at any time, (a) withdraw a quantification protocol, and (b) determine that no further emission offset projects may be initiated under that withdrawn quantification protocol. (2) Where the director withdraws a quantification protocol, the director shall prescribe the duration of (a) (b) the offset crediting period, the extension period of any emission offset project that was initiated under that quantification protocol prior to its withdrawal. (3) Subject to subsection (5), where the director replaces a withdrawn quantification protocol with a new quantification protocol, the emission offset project developer of an emission offset project initiated under the withdrawn quantification protocol may continue generating emission offsets using (a) (b) the withdrawn quantification protocol until (i) (ii) the last day of the crediting period, or the last day of the extension period, whichever is applicable, or the new quantification protocol as of the date specified by the director. (4) The director may require that the emission offset project developer of an emission offset project initiated under a withdrawn quantification protocol to apply a new quantification protocol to the emission offset project as of the date specified by the director. (5) When applying a new quantification protocol to an emission offset project initiated under a withdrawn quantification protocol, prior to applying the new quantification protocol, the emission offset project developer shall (a) (b) (c) (d) update the project plan, update the description of the baseline condition, update the description of the emission offset project condition, and use all applicable emission factors in accordance with the new quantification protocol. (6) Notwithstanding subsections (1) to (5), if the specified gas emission reduction or sequestration from an emission offset project or a portion of an emission offset project becomes required by law, that emission offset project or that portion of an emission offset project will not be eligible to generate emission offsets on or after the date the specified gas emission reduction or sequestration becomes required by law. Aggregated projects 7(1) An emission offset project developer may submit two or more emission offset subprojects to the Registry as an aggregated project. (2) Subject to section 5, each emission offset subproject that an emission offset project developer submits to the Registry as part of an aggregated project must be initiated and implemented according to the same quantification protocol. Dec 2017 Standard for Greenhouse Gas Emission Offset Project Developers Page 9 of 33

10 Subprojects 8(1) An emission offset project developer may not add any emission offset subprojects to an aggregated project after the date on which the project plan was submitted to the Registry unless the emission offset project developer first submits an updated aggregated project planning sheet to the Registry. (2) Where an emission offset project developer adds an emission offset subproject to an aggregated project after the date on which the emission offset project developer submits the project plan to the Registry, the emission offset project developer is prohibited from generating emissions offsets from the emission offset subproject until the date the emission offset project developer submits the updated aggregated project planning sheet to the Registry. (3) No emission offset subproject is eligible to generate emission offsets prior to the to the activity start date of that emission offset subproject. Project plan Division 3 Project Plan and Offset Crediting Period 9(1) The emission offset project developer shall submit to the Registry (a) and A completed project plan for an emission offset project in the form and including all of the information prescribed in the Project Plan Form, as amended or replaced from time to time; (b) in the case of (i) (ii) an aggregated project, other than an aggregated project initiated under the approved Quantification Protocol for Conservation Cropping, the completed aggregated project planning sheet including the information and data required by the director for each emission offset subproject within the aggregated project; an emission offset project developer that has more than one aggregated project initiated under the approved Quantification Protocol for Conservation Cropping, the completed master planning sheet including the information and data required by the director for each emission offset subproject that the emission offset project developer has initiated under that quantification protocol. (2) The emission offset project developer must sign the completed project plan, prior to submitting it to the Registry. (3) After an emission offset project developer submits a complete project plan, the project shall be posted on the Registry. Offset start date 10(1) The offset start date for an emission offset project is (a) January 1 of the year the project plan is submitted to the Registry, in the case of an aggregated project initiated or implemented using the Quantification Protocol for Conservation Cropping published by the department, as amended or replaced from time to time, or (b) the first day on which the project plan for the emission offset project is posted on the Registry, in any other case. Dec 2017 Standard for Greenhouse Gas Emission Offset Project Developers Page 10 of 33

11 (2) The offset start date for an emission offset project that is not an aggregated project must be on or after the activity start date of that emission offset project. Offset crediting period 11(1) Subject to section 6, the offset crediting period for an emission offset project is eight consecutive years beginning on the offset start date, unless otherwise specified in the applicable quantification protocol, in which case the offset offset crediting period is that period set out in the applicable quantification protocol. (2) An emission offset project developer must not generate emission offsets after the last day of the offset crediting period for that emission offset project, unless otherwise authorized in writing by the director. Extension period 12(1) The emission offset project developer may apply to the director, no more than six months and no less than thirty days before the last day of the offset crediting period of an emission offset project, for an extension period. (2) The director may grant or refuse to grant an extension period in subsection (1). (3) Where the director grants an extension in subsection (2), the director may impose on the emission offset project developer any terms and conditions that the director considers appropriate with respect to the extension. (4) The emission offset project developer must comply with each term and condition imposed by the director under subsection (3). (5) The director will not grant an extension period for an emission offset project initiated under a quantification protocol that has been subsequently withdrawn by the director under section 6 unless the withdrawn protocol has been replaced by a new quantification protocol. (6) An extension period granted to an emission offset project under this section must (a) (b) begin on the day immediately following the last day of the offset crediting period of the emission offset project, and be no more than five consecutive years, unless otherwise specified in the applicable quantification protocol, in which case the extension period is that which is specified in the applicable quantification protocol. (7) An emission offset project developer must not generate emission offsets after the last day of the extension period for that emission offset project. (8) Where the director grants an extension period to an emission offset project, the emission offset project developer shall (a) (c) (d) apply the most current version of the applicable quantification protocol to the emission offset project, update the baseline condition, and update the project plan on or before the date specified by the director when granting the extension. Registration Division 4 Registration, Project Report and Verification 13(1) The emission offset project developer shall register an emission offset project by submitting the following documents to the Registry: (a) the project report; Dec 2017 Standard for Greenhouse Gas Emission Offset Project Developers Page 11 of 33

12 (b) (c) (d) and (e) in the case of an aggregated project, the aggregated project reporting sheet containing the information and data required by the director; the verification report prepared in accordance with the Standard for Greenhouse Gas Verification; a statutory declaration (i) (ii) confirming that the emission offset project developer has the exclusive authority to transact in the emission offsets identified in the greenhouse gas assertion included in the project report, and confirming that the emission offsets and associated environmental attributes of the emission offset project have not been, and will not be, (A) (B) applied in relation to a regulatory requirement under another enactment, or submitted for recognition under any other offset or other recognition scheme; any other information required by the director. (2) An emission offset project developer must not use an emission offset that has not been assigned a serial number to meet a net emissions intensity limit for a facility. (3) Where the emission offset project developer submits more than one project report for an emission offset project, the emission offset project developer must not report on the same, or any portion of the same, reporting period as any other project report submitted for that emission offset project. Project report 14(1) Subject to subsection (2), the emission offset project developer must submit the written project report for an emission offset project in the form and include the all of information prescribed in the Project Report Form, as amended or replaced from time to time. (2) The emission offset project developer must identify in the project report all sections of the Project Report Form that do not apply to the emission offset project, and provide an explanation as to why the sections do not apply. (3) The emission offset project developer must (a) (b) sign the emission offset project report, and complete the emission offset project report before a third-party verifier verifies it. (4) If, at any time, the emission offset project developer makes any changes to the emission offset project as compared to the project plan, the emission offset project developer shall record all of these changes in the project report. (5) If, at any time, the emission offset project developer modifies or changes the project report after it has been verified, the emission offset project developer must submit the modified or changed project report to a third-party verifier for a new verification. Verification 15(1) The emission offset project developer shall hire a third-party verifier to (a) (b) (c) verify the emission offset project, verify the project report, and prepare a verification report in accordance with the Standard for Greenhouse Gas Verification. Dec 2017 Standard for Greenhouse Gas Emission Offset Project Developers Page 12 of 33

13 (2) An emission offset project developer may only hire the same third-party verifier for a maximum of five consecutive verifications of an emission offset project. (3) Following the fifth consecutive verification of an emission offset project by the same third-party verifier, the emission offset project developer shall not hire that third-party verifier for at least two consecutive verifications of that emission offset project. Re-verification Division 5 Re-verification 16(1) After an emission offset project has been registered under section 13, the director may select a project report of that emission offset project to be re-verified by a third-party verifier who is selected and hired by the director. (2) Where the director selects a project report to be re-verified in subsection (1), the director may provide any direction to the emission offset project developer of the emission offset project that the director considers necessary to facilitate the re-verification. (3) The emission offset project developer shall comply with any direction provided to the emission offset project developer by the director in subsection (2). (4) The emission offset project developer of an emission offset project selected for re-verification must not make any changes to the project report from the date the emission offset project is selected for reverification until the date the re-verification is completed. Re-verification terminated 17(1) Where the third-party verifier terminates the re-verification of a project report in accordance with the Standard for Verification, the emission offset project developer shall (2) If (a) (b) (c) (d) resolve any issues that led to the termination of the re-verification in accordance with directions provided by the director, revise the project report, hire a third-party verifier, selected by the director, to re-verify the revised project report, and submit to the director a revised verification report for the revised project report within six months of the date on which the third-party verifier terminated the re-verification. (a) the third-party verifier terminates the re-verification of a project report for an emission offset project in accordance with the Standard for Verification, and (b) the emission offset project developer fails to comply with any part of subsection (1), the emission offsets generated by the emission offset project during the reporting period of that project report are invalid. Errors identified by the third-party verifier during re-verification 18(1) Where a third-party verifier, during the course of a re-verification, identifies a material error in the project report that results in an understatement of the emission offsets generated by an emission offset project, the emission offset project developer must not claim the emission offsets that were not included for in the verified project report. (2) Where a third-party verifier, during the course of a re-verification, identifies a material error in the project report that results in an overstatement of the emission offsets generated by an emission offset project, the emission offset project developer shall Dec 2017 Standard for Greenhouse Gas Emission Offset Project Developers Page 13 of 33

14 (a) (b) (c) (d) correct the error in the emission offset project, update the project report, hire a third-party verifier, selected by the director, to re-verify the emission offset project, and submit to the Registry (i) (ii) (iii) the updated project report, a new verification report of the updated project report, and a new statement of verification of the updated project report in accordance with a written schedule set by the director. (3) If the emission offset project developer fails to comply with any part of subsection (2), the emission offsets generated by the emission offset project during the reporting period of that project report are invalid. Errors identified by emission offset project developer 19(1) An emission offset project developer must report in writing a material error in a verified project report to the director as soon as possible and in any event not later than 30 days after the emission offset project developer became aware, or should reasonably have become aware, of the material error. (2) Where an emission offset project developer becomes aware of a material error in a verified project report that results in an understatement of the emission offsets generated by an emission offset project, the emission offset project developer must not claim the emission offsets that were not included in the verified project report. (3) Where an emission offset project developer becomes aware of a material error in a verified project report that results in an overstatement of the emission offsets generated by an emission offset project, the emission offset project developer must (a) (b) (c) (d) correct the error in the emission offset project, update the project report, hire a third-party verifier to re-verify the emission offset project, and submit to the Registry (i) (ii) (iii) the updated project report, a new verification report of the updated project report, and a new statement of verification of the updated project report in accordance with a written schedule set by the director. (4) If the emission offset project developer fails to comply with any part of subsection (3), the emission offsets generated by the emission offset project during the reporting period of that project report are invalid. (5) Subsections (3) and (4) do not apply to a project report that the director has selected to be re-verified by a third-party verifier under section 16. Invalid emission offsets 20(1) Where (a) an emission offset is invalid under section 17(2), 18(3), or 19(4), (b) some or all of the emission offsets claimed in a project report are invalid because the emission offsets were (i) (ii) applied in relation to a regulatory requirement under another enactment, or submitted for recognition under any other offset or other recognition scheme, Dec 2017 Standard for Greenhouse Gas Emission Offset Project Developers Page 14 of 33

15 or (c) a third-party verifier finds that some or all of the emission offsets claimed in a project report are invalid because (i) (ii) (iii) some or all of the tonnes of specified gases which the project report represented as not being released into the environment were released into the environment, the calculation of the emission offsets was incorrect or was based on incomplete, inaccurate, incorrect or false information, or some or all of the tonnes of specified gases which the project report represented as being reduced or sequestered were released into the environment, the invalid emission offsets will be withdrawn from the Registry and the serial numbers assigned to those emission offsets will be given a status of cancelled. (2) Once an emission offset is withdrawn from the Registry, the emission offset must not be purchased or used in meeting a net emissions intensity limit for a facility. Contact Information Division 6 Miscellaneous Provisions 21 An emission offset project developer must immediately notify the director in writing of any changes to the contact information provided by the emission offset project developer in a project plan or project report. Reporting 22 The emission offset project developer must immediately report any contravention of this standard to the director. Standard amendment 23 Part 1 of this standard will be reviewed as changes in technology and other standards warrant. Effective date 24 This standard is effective January 1, Dec 2017 Standard for Greenhouse Gas Emission Offset Project Developers Page 15 of 33

16 Part 2 - Requirements for Greenhouse Gas Emission Offset Project Developers 1.0 Overview of the Alberta Emission Offset System The Alberta emission offset system is a regulatory program managed by the Alberta Climate Change Office that enables facilities regulated under the Carbon Competitiveness Incentive Regulation to purchase and retire emission offsets to meet compliance obligations. System requirements are set out in the Climate Change and Emissions Management Act, the Carbon Competitiveness Incentive Regulation, Standards, Guidelines, and quantification protocols. The Alberta emission offset system is based on the ISO specification with guidance at the project level for quantification, monitoring and reporting of greenhouse gas emission reductions or removals. The scope of Part 2 of this standard is to provide information to emission offset project developers, to assist them with the initiation and implementation of an emission offset project. This standard may also be informative to other stakeholders in the Alberta emission offset system. The objective of Part 2 of this standard is to: provide additional guidance on the requirements of the Alberta emission offset system as they apply to an emission offset project developer, describe the process an offset project developer can follow to initiate and implement an emission offset project in Alberta, and explain the documents, records and data management systems needed to support emission offset project implementation in the Alberta emission offset system. Project developers can contact the Alberta Climate Change Office via AEP.GHG@gov.ab.ca 1.1 Aggregated Projects An aggregated project is: two or more emission offset subprojects that an emission offset project developer submits to the Registry as a single aggregated emission offset project. An offset project developer that submits an aggregated project is referred to as an aggregator. The benefit of an aggregated project is that the offset project developer can minimize administration and verification costs associated with each emission offset subproject by combining multiple similar subprojects into a single aggregated project. Aggregators must submit an aggregated project planning sheet with the project plan and an aggregated project reporting sheet with each project report. The planning sheet will be for internal use only and not be publically available on the Registry. The planning sheet will include information for each subproject such as project name, location, activity start date, and/or unique site identifier. The reporting sheet will similarly include information on each subproject including its name, location, and calculated emission offsets. The aggregated project planning sheet and reporting sheet forms are available from the Registry. An aggregated project may have subprojects that begin operating at different times, meaning they have different activity start dates. If the activity start date for a subproject is before the offset start date, the subprojects listed in the project planning sheet start generating emission offsets on the offset start date. If the activity start date for a subproject is after the offset start date and the project developer adds the subproject by updating the planning sheet, the subproject may generate emission offsets beginning on the date the updated project planning sheet is submitted to the Registry until the end of the offset crediting period for the overall project. This will mean a credit duration of less than 8 years for the subprojects added after the offset start date. The intent of this is to ensure go forward crediting from the time of project initiation and go forward crediting from the time subprojects are added to an emission offset project. Land based agricultural projects must also meet the intent of go forward crediting for projects and subprojects. The requirements for projects using the Agricultural Nitrous Oxide Emission Reductions and Conservation Cropping protocols are articulated below. Dec 2017 Standard for Greenhouse Gas Emission Offset Project Developers Page 16 of 33

17 Agricultural Nitrous Oxide Emission Reductions Projects This section sets out additional requirements that apply to projects using the Agricultural Nitrous Oxide Emission Reduction protocol. The offset start date is defined in Part 1 as the date the offset project plan is posted to the Registry. In the case of Agricultural Nitrous Oxide Emission Reductions offset projects, the project developer must submit the offset project plan before the implementation of nitrogen fertilizer management practices in the same cropping year. Offset project plans posted to the Registry after May 1 of a year will not be eligible to generate emission offsets in the same calendar year. Projects and subprojects cannot be compiled annually in the way that Conservation Cropping projects can be. The subproject cannot generate emission offsets outside of the aggregated project s offset crediting period. Conservation Cropping Projects Project developers that initiate multiple aggregated projects using the Conservation Cropping Protocol must submit a project plan for each aggregated project before May 1 of the year the project is generating emission offsets. The project developer must also submit a master planning sheet that includes all subprojects using the Conservation Cropping Protocol prior to May 1 of the year the subproject is generating emission offsets. The master planning sheet is similar to an aggregated project planning sheet but includes all subprojects of the project developer s Conservation Cropping Protocol aggregated projects in a single master planning sheet. Subprojects identified in the master planning sheet are eligible to generate emission offsets from January to December of a year provided they are included in the master planning sheet prior to May 1 of that year. For aggregated projects that do not compile annually (i.e. the credit duration is longer than one year) an updated master planning sheet must be provided to the Registry prior to May 1 in order to add subprojects in that calendar year. The aggregator must submit an aggregated project reporting sheet with the offset project report that is a list of all farmers and land locations that met the requirements of the Conservation Cropping protocol for the year emission offsets are generated. The land locations listed on the aggregated reporting sheet must be listed in the master planning sheet prior to May 1 of the vintage year emission offsets are generated. Table 1 provides protocol-specific examples for activity start dates, offset start dates and offset crediting periods for some protocol types. Table 1: Examples of Offset Crediting Periods for Aggregated Project and Subproject Eligibility to Generate Offsets Quantification Protocol Offset Start Date Aggregated Project Offset Crediting Period Activity Start Dates and Updated Project Planning Sheet submission Subproject Eligibility to Generate Offsets All May 1, 2018 May 1, 2018 to April 30, 2026 Subproject 1 installed January 1, 2017 May 1, 2018 to April 30, 2026 for subproject 1. (date posted on Registry) (8 years) Subproject 2 installed June 1, 2019, updated project planning sheet received June 30, 2019 June 30, 2019 to April 30, 2026 for subproject 2. Greenhouse Gas Emission Reductions from Pneumatic Devices March 30, 2018 (date posted on Registry) March 30, 2018 to December 31, 2022 (protocol expires December 31, 2022) Subproject 1-50 installed leading up to March 30, 2018 Subproject 51 installed April 15, 2018, updated project planning sheet received July 2, March 30, 2018 to December 31, 2022 for subprojects July 2, 2018 to December 31, 2022 for subproject 51. Dec 2017 Standard for Greenhouse Gas Emission Offset Project Developers Page 17 of 33

18 Quantification Protocol Offset Start Date Aggregated Project Offset Crediting Period Activity Start Dates and Updated Project Planning Sheet submission Subproject Eligibility to Generate Offsets Conservation Cropping (if compiled annually) January 1, 2018 January 1, 2018 to December 31, Subprojects 1-50 listed in master planning sheet submitted to the Registry April 30, January 1, 2018 to December 31, 2018 for subprojects 1-50 Conservation Cropping (if not compiled annually) January 1, 2018 January 1, 2018 to December 31, 2021 (protocol expires December 31, 2021) Subprojects 1-50 listed in master planning sheet submitted to Registry April 30, 2018 Subprojects listed in the updated master planning sheet submitted to Registry April 30, 2019 January 1, 2018 to December 31, 2021 for subprojects 1-50 January to December 31, 2021 for subprojects Baseline Condition and Project Condition The baseline condition represents the specified gas emissions that would have occurred had the offset project not been implemented. It is quantified using the applicable protocol. The project condition describes the specified gas emissions that will occur once the project is implemented. Where the emissions from the project condition are less than the emissions from the baseline condition, the difference represents the specified gas emission reduction, or sequestration for the emission offset project. 1.3 Conservativeness Conservativeness is a principle that is defined as the use of conservative assumptions, values and procedures to ensure that specified gas emissions reduction or sequestration is not over-stated. Offset project developers must apply the principle of conservativeness when developing emission offset projects. If there is a decision point during project development where an offset project developer needs to decide on an approach to quantification, measurement, a flexibility mechanism etc. the project developer must choose a conservative approach. The choices should be rationalized and documented in the offset project plan. A negligible emissions threshold has not been set for emission offset projects. Project emissions must be assessed according to the applicable quantification protocol. The quantification must include each relevant specified gas applicable to the project. The specified gases and applicable global warming potentials (GWPs) are listed in the Standard for Completing Greenhouse Gas Compliance and Forecasting Reports. 1.4 Expansion Where a greenhouse gas reduction activity is a result of expanding an existing facility or project, the expansion activity may be eligible to generate emission offsets. The offset project developer must submit a written request to the director for consideration of an offset project to be eligible to generate emission offsets for the expansion activity. The director will consider each request on a case by case basis and may approve or refuse the request. In addition to meeting all other program requirements the project developer must demonstrate that the following criteria are met: The expansion has increased production by more than 25 per cent, There is a clear accurate method for separating the emissions from the expansion activity from the original activity; and The investment in infrastructure is greater than 35 per cent of the cost to build a new facility capable of the same level of production as the expansion. Dec 2017 Standard for Greenhouse Gas Emission Offset Project Developers Page 18 of 33

19 1.5 Right to Transact Emission Offsets In order for an emission offset project developer to sell emission offsets in the Alberta emission offset system they need to provide a statutory declaration stating that they have the right to sell the emission offsets. The director relies on the statutory declaration as proof of the emission offset project developer s right to transact. The evidence of emission offset ownership may vary between projects and activity types, and may be more complex in the case of aggregated projects. It is the emission offset project developer s responsibility to ensure that they are the owner and/or have the authority to transact on the emission offsets associated with an emission offset project. It is also the emission offset project developer s responsibility to resolve any ownership disputes outside of the offset system process; the director and/or the department will not participate in ownership disputes Land Based Projects Aggregated agricultural land based projects are required to have proof of practice records for the project activity both at the location where the reduction occurred and with the third-party aggregator. Both proof of practice and consent from the land owner are required for projects to generate emission offsets. Indian reserves are administered and controlled by Her Majesty the Queen in right of Canada ( Canada ) for the use and benefit of a particular First Nation. A First Nation, a First Nation member or anyone engaging in relevant activities on reserve must enter into an agreement with Canada in order to claim emission offsets generated on reserve land. Metis Settlement land is held in fee simple by the Metis Settlements General Council (MSGC) under letters patent issued by Her Majesty the Queen in right of Alberta. A Metis Settlement, a Metis Settlement member or anyone engaging in relevant activities on Metis Settlement land must enter into an agreement with the MSGC in order to claim emission offsets generated on settlement land. 1.6 Project Extension The recommended time frame for submitting extension requests is four to six months prior to the end of the offset crediting period. The director will not accept extension requests submitted later than thirty days before the last day of the offset crediting period. An offset project extension request must include the following information for the director s consideration in determining whether to grant an extension period: demonstration that the offset project continues to meet the Alberta emission offset system requirements, and explanation of any changes to the baseline condition and offset project condition. The director will provide a decision to the request in a letter and a copy of the letter will be forwarded to the Registry. The decision will be posted on the Registry as part of the supporting information for the offset project. 1.7 Protocol Deviation Requests Emission offset project developers may apply to the director for a deviation when one or more of the requirements of a quantification protocol cannot be met. Common examples of appropriate use of a deviation request include: an emission offset project that has a source or sink that is not included in the protocol, an emission offset project has a source or sink that can not be recorded or quantified as indicated in the protocol. The director will only consider deviation requests for quantification protocols, and will not grant deviations for other system requirements. An application for deviation must identify which protocol requirements require a deviation and explain how the integrity of the quantification will be maintained if the deviation is granted. The director may consider a variety of factors, including but not limited to whether the deviation: will materially impact the quantification of emission offset tonnes in the project, Dec 2017 Standard for Greenhouse Gas Emission Offset Project Developers Page 19 of 33

20 will affect the additionality of the emission offset project, is conservative, and quantifies emission reductions that meet Alberta emission offset system requirements. If approved, the director will issue authorization of the deviation with instructions to the emission project developer, and the deviation authorization will be posted to the Registry. 1.8 Protocol Flagged Protocols may be flagged for a number of reasons, including but not limited to: inconsistencies and/or errors in a quantification protocol, change in science, change in records requirements, potential for double counting, potential for double pricing of emission reductions, if the activity is no longer considered additional, and a change in regulatory requirements. Flagged protocols will be assessed by the director to determine if the protocol will be withdrawn or withdrawn and replaced with a revised protocol; and how the offset crediting period or extension period of any existing emission offset project will be affected. See section 4(6-8) of Part Protocol Withdrawn See section 6 of Part 1. Quantification protocols may be withdrawn for a number of reasons, including but not limited to: if the reduction activity o o o o becomes required by law, becomes directly priced, could result in double counting of emission reductions, is no longer additional, changes in science, errors identified in the protocol. The reason for withdrawal will impact whether the protocol is replaced. It will also affect whether, and the conditions under which, any projects initiated under the withdrawn protocol may continue generating emission offsets. Where a specified gas emission reduction associated with a quantification protocol becomes required by law, refer to section 6(6) of Part 1. If a protocol is withdrawn because the reduction activity becomes required by law, the offset crediting period (or extension period) for existing projects will end immediately, unless the withdrawn quantification protocol is replaced with a new quantification protocol. If the protocol is replaced, the project must apply the new quantification protocol in accordance with Part 1 Sections 6(4) and (5). If a protocol is withdrawn because: the reduction activity is no longer additional, there are changes in science, and/or Dec 2017 Standard for Greenhouse Gas Emission Offset Project Developers Page 20 of 33

21 errors have been identified, and the protocol is replaced with a new quantification protocol, the project developer may choose whether to continue generating emission offsets using the withdrawn quantification protocol or using the new quantification protocol, in accordance with Part 1 section 6(3). The project developers for any existing projects that apply a new quantification protocol must update the project plan, update the description of the baseline condition, update the description of the emission offset project condition, and use all applicable emission factors in accordance with the new quantification protocol. If a protocol is withdrawn or withdrawn and revised because the reduction activity becomes priced or could result in double counting of emission reductions or for another reason not mentioned above, the treatment of existing projects will be determined by the director Requests to use more than one protocol Emission offset project developers may apply to the director for authorization to use more than one quantification protocol for the same emission offset project. When reviewing requests to use more than one quantification protocol in an emission offset project, the director will consider if: the emission offsets quantified under each protocol must be directly connected through a shared emission reduction activity, the application explains how the project will meet all of the requirements of each protocol, the application identifies the risks for quantifying the offsets under more than one protocol, and the application outlines how the risks will be mitigated. If an aggregated project is using more than one protocol, the project developer must submit an aggregated project planning sheet and reporting sheet for each protocol type Carbon Offset Emission Factors Handbook The Carbon Offset Emission Factors Handbook published by the Department (the Handbook ) contains a listing of common emission factors and quantification methodologies that emission offset project developers use in initiating and implementing emission offset projects. Emission factors and quantification methodologies are subject to periodic updates. Emission offset project developers must use the most current version of the Handbook when initiating an emission offset project. If the Handbook is updated during the offset crediting period or extension period of an emission offset project, the emission offset project developer may continue to use the emission factors from the version of the Handbook that the project was initiated under for a project report, or may choose to use the updated emission factors. When using updated emission factors in a project report, the emission offset project developer must (1) use all applicable emission factors in the Handbook, (2) reassess and apply the updated emission factors to the baseline and project conditions, and (3) record the use of updated emission factors in the offset project report. The emission offset project developer must not use emission factors from different versions of the Handbook in a single project report. In the case of aggregated projects, this means that the addition of a subproject will automatically result in a requirement to update all emission factors to the most recent version of the Handbook. If the Handbook is updated during the offset crediting period or extension period of an emission offset project, the emission offset project developer may continue to use the methodology from the version of the Handbook the project was initiated under for a project report, or may choose to use the updated quantification methodologies. When using an updated methodology in a project report, the emission offset project developer must (1) also update to all applicable emission factors in the Handbook, (2) reassess and apply the updated quantification methodology to the baseline and project conditions, (3) update the offset project plan, and (4) use the most current quantification protocol. Dec 2017 Standard for Greenhouse Gas Emission Offset Project Developers Page 21 of 33